Recruiting in a recesssion

As headlines about the national and global economy become gloomier by the day, it’s tempting to assume that the recruitment market must be in freefall. While it is more depressed than it has been for years, experts agree that the situation is still complex.

Certain sectors are facing a decline in recruitment activity, while others are holding up. And HR professionals have an important role to play, both in terms of helping to avert a catastrophic collapse of confidence and finding ways to recruit the best staff within tight budget constraints.

The latest quarterly survey carried out by Ipsos Mori for the Chartered Institute of Personnel and Development (CIPD) and professional services firm KPMG of 1,221 employers found that employment prospects are weaker than at any time since the survey started in 2004, with recruitment activity falling and redundancies set to increase. The number of employers planning redundancies has increased from 22% to 27% since the last quarterly survey, while pay expectations are modest, despite higher inflation.

“The picture is mixed, although we see that recruitment intentions are highest in the private sector and lowest in the public sector, and redundancy intentions are highest in the public sector,” says Claire McCartney, adviser, resourcing and organisation, at the CIPD. “But despite this, there are still skills shortages in some areas, such as engineering and science.”

HR response

How HR is responding to this varies according to budget, says McCartney. But most organisations are trying to cut costs where they can. “Many see a shrinking role for recruitment agencies,” she says. “And they are looking at new avenues, such as social networking sites, and trying to raise the profile of their organisation in the job market.”

Even so, the CIPD survey found that Web 2.0 (second-generation use of the internet for recreation as well as simply a source of information) is still not widely used. More than eight in 10 respondents reported that they don’t use this form of technology to attract or recruit employees. Most (71%) don’t plan to introduce such technology in the next year, either. However, there is some interest in using social networking sites to attract or recruit new staff, the most popular sites being LinkedIn, Facebook and MySpace.

According to recruitment firm Fish4jobs, recruiters are becoming more cautious with their budgets, but there are still plenty of vacancies being advertised. Two-thirds of employers in a recent survey admitted that it is much harder to recruit with less money to spend, and more recruiters are using their own websites to promote their vacancies (now 65% – up from 57% last year).

When asked what methods they have used to attract candidates, more than half (57%) of respondents said they had used recruitment consultancies, the same percentage used their own websites, and 54% used jobs boards.

New approach

Some employers are using this method for the first time, making organisations such as Fish4jobs unexpected beneficiaries of the downturn. “Recently, we have had 39,000 jobs on the site at any one time. At the moment, we have 45,000,” says chief executive Joe Slavin. “When money is tight, using sites like ours seems more attractive. Internet options generally become more appealing.”

Slavin is confident that employers can get good value for money from internet recruitment – and this needn’t mean losing the personal touch, either. Using Fish4jobs, employers which, for example, want to hire an accountant in Portsmouth, can send an e-mail to all the candidates with the right qualifications in that area, asking them to get in touch if they want to attend an interview.

“Job candidates can feel isolated and demoralised and may be sending off 15 or 20 applications and hearing nothing,” he says. “A system such as this means you can generate goodwill before you have even interviewed a candidate.”

Strategic thinking

Turning to recruitment process outsourcing may be a solution, but this is unlikely to be successful if undertaken solely to cut costs. Once again, there is no substitute for strategic thinking and employers should only use agencies with experience of the right sector and access to the communities they want to target.

Raj Nasta, sales director of Zest 4 Recruitment, which specialises in sales and marketing recruitment, says HR directors are taking the opportunity to bring fresh thinking to their hiring strategies. “There’s a sense of going back to basics. HR people are coming to us and saying: ‘What can we do to rectify the situation?’ That’s a positive step – they are not seeing it as ‘us and them’.”

But other employers are trying to do without agencies altogether. Nasta insists this can work only when organisations have a good understanding of their section of the recruitment market. If not, it’s too easy to end up spending thousands on job ads without making a successful appointment.

Whatever your sector, the key is to plan long-term, rather than allow short-term resourcing issues to induce panic. “The situation is not all doom and gloom if agencies and employers have strong relationships and see each other as partners,” says Anthony Pierce, practice leader, HR at recruitment firm Hudson.

“Agencies need to add value and employers will get more out of the relationship if they realise this, and work more closely with fewer agencies, rather than spreading their business too widely. They may even get better value for money.

“It’s at times of economic downturn that good agencies are able to help clients make the right appointments and demonstrate their worth.”

Pierce also argues that short-term thinking is dangerous even when times are good. “I don’t think people saw this coming, and there is an issue about suddenly finding that there is no money to make appointments.

“There are ways that HR can stretch the recruitment budget, but the better the provisions they have put in place when they had more resources, the better off they will be now. Employers should have talent pools in place from which they can recruit people when they need them.”

Stretch your recruitment budget in a downturn

  • Only use agencies with experience of your sector and access to the type of people you are seeking to recruit.
  • Work closely with fewer agencies to ensure you get best value for money.
  • If you do use agencies, make sure you feed back statistics and advice they produce to staff, and keep line managers involved throughout the selection process.
  • If you find the right person, don’t let them go. Let them know you are keen, and invite them for a second interview as soon as possible. In a tight market, candidates will snap up a good job if they find it.


Case study – Vodafone

Mobile phone retailer Vodafone has 10,000 UK employees based at its headquarters in Newbury, Berkshire, a number of regional contact centres, and about 350 retail stores. It recruits about 3,000 staff into new positions each year – 2,000 from external candidates, and 1,000 internally. The disciplines covered include customer services, retail, technology, marketing, finance and HR.

The economic climate means that looking for value for money is more crucial than ever in all areas of business, but resourcing operations manager Anna Tomkins says that establishing best-value, cutting-edge quality recruitment processes has always been essential in this competitive market.

“We are always looking at ways to be more effective in how we recruit,” she says. “We have to be focused and deliver what is needed to support the business strategy. This may mean delivering things in a different way to before.”

Vodafone partners with three firms for recruitment process outsourcing, each of which manages a different aspect of its recruitment process. Alexander Mann Solutions manages specialist and head office roles Adecco handles retail adviser roles and Reed manages recruiting customer service advisers. All have been working with Vodafone for the past four years.

This has improved the effectiveness of Vodafone’s recruitment systems, says Tomkins, and the company has an ongoing improvement programme designed to encourage partners to deliver the best possible experience for the candidate during the process.

“Working with resourcing partners helps us take stock of what opportunities there are to do things more efficiently,” she says. “For instance, each partner provides regular activity information and suggests improvements to the process and experience.

“Last year, we found we were running a number of assessment centres for roles where we felt this was not the most appropriate approach. By developing and implementing interview skills training for line managers, we were able to give them more confidence to participate in the right type of assessment at the right time. It also helped streamline our approach and improve the candidate experience.”

The company is also using input from external recruitment specialists to help improve the experience of candidates applying for jobs, and to hone the recruitment skills of line managers. “We are careful not to expect line managers to accommodate too many changes at once and we plan our calendar of improvements around what the business is doing overall,” says Tomkins.

She believes that while the perspective of external specialists is useful, any findings should be fed back to staff if they are to have an impact. For example, line managers were involved at every stage in a recent initiative to improve their interview skills, and their views and expectations were built into the process.

Comments are closed.